Guidelines on Backing out from a Purchase Agreement

HomeReal Estate

  • Author Jack Forsythe
  • Published August 11, 2010
  • Word count 483

As a home buyer you need to make sure that before you go into any purchase agreement you know your way out of it. This means that it is important for a home buyer to know the concerns revolving around backing out on a deal. You must make sure that you understand what is involve when you cancel a purchase agreement, like it's limitations and repercussions. Buying a real estate property is a long process and there are certain factors that might cause some issues which may prove to be deal breakers and would cause you or any buyer to back out from the deal.

If you are checking Coronado homes for sale and have started working on purchasing a particular Coronado real estate property, there are some things out is out of your control that might happen. This could be some personal issues, some financial drain, potential financial problem in the future, or issues with the lender, or it has something to do with the property itself that you are trying to buy. However, you should also realize that there might be some legal problems if you do not honor your purchase agreement.

It is very important that you read and double check the purchase agreement and understand all the cancellation clauses. What you can do is set contingencies and if the seller agrees to it then everything is clear. some common contingencies that buyers usually put on the purchase agreement are related to appraisals, like they will only continue to purchase the house if the appraisal met the amount and it is not low. Another example would be something like if all the agreed repairs that the seller needs to complete only then will the sale progress. At times, some buyer put a contingency that they will only push through with the sale after getting their other property sold within a given timeframe.

Depending on your location, there are some states that requires an inspection before you and the seller can complete a purchase agreement. There are also some states that asks the buyer to sign a contract first before any inspection can occur and if the result of the inspection is not favorable then the buyer has a clean option to back out of the deal and have the deposit money returned to the buyer.

Some states have a common inspection period of 17 days. If you have contingencies in place, you can extend the 17 days until the seller object because you are keeping the property off from the market and are not showing any good signs that you will buy the property.

If this happens the seller will give a Notice to Perform which gives you 24hrs. - 72hrs. to remove your contingency to extend the inspection time. If you do not make any actions after 72hours, then the seller will have the right to back out from the deal.

Jack Forsythe is a freelance writer who writes about articles related to real estate. Visit our website for more information about Coronado homes for sale and Coronado real estate.

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